Week 19 Day 4 Action Items

Day 4

• [ ] Learn about the typical stages of an IRS audit.
• [ ] Understand your rights and responsibilities during an audit.
• [ ] Explore resources for guidance and support.

The typical stages of an IRS audit

1. Notification:
   • The IRS notifies the taxpayer by mail, stating the reason for the audit and requesting specific documentation.
   • The notification includes details about which part of the tax return is under review.
2. Initial Contact:
   • The taxpayer may receive a phone call or a visit from an IRS agent to discuss the audit.
   • The agent provides information about the audit process and answers any initial questions.
3. Document Submission:
   • The taxpayer is required to submit relevant documentation to support the items being audited.
   • This may include receipts, invoices, bank statements, and any other records related to the tax return.
4. Field Examination (if applicable):
   • For more complex audits, the IRS may conduct a field examination at the taxpayer's place of business or at the office of their tax professional.
   • The IRS agent reviews records and may interview the taxpayer or their representatives.
5. Audit Report:
   • The IRS issues an audit report outlining the findings of the examination.
   • The report may indicate adjustments to the tax return or confirm that no changes are necessary.
6. Response and Resolution:
   • The taxpayer has the opportunity to respond to the audit findings, either agreeing or disagreeing with the proposed adjustments.
   • If adjustments are agreed upon, the taxpayer may need to pay additional taxes or may receive a refund.
7. Appeals Process:
   • If the taxpayer disagrees with the audit results, they can appeal the decision within the IRS.
   • The appeals process involves an independent review of the case by the IRS Office of Appeals.
8. Litigation (if necessary):
   • If the dispute remains unresolved after the appeals process, the taxpayer may choose to litigate the case in federal court.
   • Litigation is typically considered a last resort and can be a lengthy and expensive process.

***Please consult a tax professional to assist you with the audit process.